Combines all the existing direct taxes into a single law
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Salient features
A brand new income-tax law, subject to Parliament nod.
The language of the law would be simple.
Removal of redundant provisions of law from the statute.
Similar provisions are to be regrouped and placed at one place in a chapter-wise format.
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A brand new income-tax law that provides for easy reading and understanding of the provisions may become a reality from April 1, 2008.
An expert group of Central Board of Direct Taxes (CBDT) that was constituted to suggest simplification of the Income-Tax Act, 1961, submitted its report to the Union Finance Minister, Mr P. Chidambaram, hereon Friday.
The Government is looking at enacting a `direct tax code' that combines all the existing direct taxes such as income-tax, wealth tax, and fringe benefit tax into a single code.
"This is not a report to amend the existing Income-Tax Act. This report is about a brand new Income-Tax Act, which will come into force from April 1, 2008, that is, for assessments made in the assessment year 2009-10," Mr Chidambaram told reporters after receiving the report from the expert group.
He made it clear that the existing Income-Tax Act would continue and all amendments would get carried out through the Finance Bill.
"What we are doing now is a futuristic exercise. We will have a brand new income-tax law in April 2008 subject to Parliament approving it well in time," Mr Chidambaram said.
The Finance Minister had announced in his Budget speech of 2005 that the Income-Tax Act, 1961, would be simplified and a new Bill would be introduced in Parliament.
Accordingly, an expert group from the CBDT was constituted to rationalise the law relating to income-tax.
Christened the `Report on simplification of the income-tax law', the expert group has combined all the existing direct taxes such as the income-tax, wealth tax and fringe benefit tax into one code known as `Direct Tax Code Bill 2006'.
It seeks to ensure that the language of the law is simple and complicated legalese is done away with. Moreover, all provisos and explanations in the existing law are to be done away with and wherever necessary, suitably incorporated in the main provision.